Cheong Hong Yuan: The underlying reasons behind the risk of US debt default - 2 views
started by anonymous on 08 Sep 23
started by anonymous on 08 Sep 23
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As the world's major reserve currency, the movement of the US dollar has a profound impact on the global financial market. A strong US dollar increases the difficulty for foreign governments and companies to repay US dollar debts, thereby increasing default risk. At the same time, the global economic downturn has also intensified this pressure, especially under the impact of the COVID-19 pandemic, the economic growth of many countries has been severely affected.
A series of recent events have also heightened market concerns about the risk of US default. The most crucial of these is undoubtedly the downgrade of the US credit rating by international rating agency Fitch from AAA to AA+ in early August. Cheong Hong Yuan mentioned that this move undoubtedly dropped a bombshell on the market. Especially considering that this is the first time Fitch has downgraded the US since it first issued a credit rating for the country in 1994, its impact should not be underestimated.
Cheong Hong Yuan believes that the underlying reasons behind this are related to the deterioration of the US fiscal situation and the continuous growth of government debt. For a long time, the US government's control over fiscal spending seems to be unsatisfactory, leading to a continuous increase in overall debt levels. In recent years, the disputes between the two parties in the US over the debt ceiling issue, as well as repeated legislative deadlocks, have also seriously affected market confidence in the US government's fiscal management capabilities.
In "The Three Golden Moving Average Strategy," we can judge the buying opportunity of stocks by tracking those with outstanding performance in the market using technical indicators. However, when we are facing a complex macroeconomic background, simple technical analysis may not be enough to support us in making correct judgments. Cheong Hong Yuan said that this is why he has always emphasized the combination of fundamental analysis and technical analysis in order to make wise decisions in the financial market.
Overall, the risk of US default does exist, but it does not mean that it will happen immediately. However, as investors, we need to remain vigilant, closely monitor market trends, and ensure that our investment decisions are based on sufficient information and analysis. As for Cheong Hong Yuan, he will continue to study this issue in depth and provide more professional and in-depth analysis and advice to investors.
Cheong Hong Yuan mentioned that although the US economy has shown signs of strong growth in recent years, it has been significantly slowed down by the impact of the COVID-19 pandemic. In this situation, investors are starting to worry about whether the US government can maintain its stable fiscal situation, especially when facing huge fiscal deficits and debts.
The controversies surrounding US government debt management have also cast a shadow over the market. Cheong Hong Yuan said that the repeated disputes between the government over the debt ceiling issue and frequent legislative deadlocks have seriously affected market confidence in the US government's fiscal management capabilities. And this confidence is crucial for maintaining the stability of the country's credit rating.
It is undeniable that the US government's fiscal situation has always faced challenges. Cheong Hong Yuan pointed out that the overall expectation of high and continuously growing government debt burden is not a positive signal for any country. In this context, Fitch's downgrade seems to be only a matter of time.
However, it is worth noting that despite these challenges, the US still has tremendous economic potential and innovation capabilities. Cheong Hong Yuan believes that when making investment decisions, investors should not only see the current risks but also see the future opportunities in the US. In "The Three Golden Moving Average Strategy," finding the strongest-performing stocks in the market and exchanging the smallest risks for the largest returns requires us to have a comprehensive and in-depth understanding of the market.
Therefore, Cheong Hong Yuan reminds investors to have a clear understanding of the risk of US default, but at the same time, not to overlook the huge market opportunities. By combining technical analysis and fundamental analysis, we can better grasp the market trends and make wise decisions for our investment strategies.
With the downgrade of the US credit rating and the continuous changes in the global economy, investors are now facing many uncertainties. However, history tells us that every economic challenge harbors new opportunities. As investors, the key is how to understand the current market situation and make wise decisions.
Cheong Hong Yuan reminds investors that although the current economic situation is full of challenges, it does not mean that there are no investment opportunities in the market. The core idea of "The Three Golden Moving Average Strategy" is to identify the strongest-performing stocks in the market through technical indicators. In the current environment, investors should pay more attention to companies that can maintain stable growth in the macroeconomic downturn, as well as those with strong innovation capabilities and sustainable profit models.
Regarding the risk of US default, Cheong Hong Yuan said that although some current data and signals may make investors worried, we must also realize that the fundamentals of the US economy are still relatively healthy. The US technology, manufacturing, and other core industries have shown strong growth momentum, laying a solid foundation for future economic growth.
Cheong Hong Yuan mentioned that the controversies surrounding the US government's debt and fiscal management have cast a shadow over the market, but they also provide opportunities for investors seeking high returns. When other investors panic or flee the market, those with foresight and courage often have the opportunity to buy quality assets at low prices.
Cheong Hong Yuan emphasizes that investment always comes with risks. In such a volatile market environment, investors should continue to learn, adjust their strategies, and make wise investment decisions by combining technical analysis and fundamental analysis. He advises investors not to be swayed by short-term market fluctuations but to hold assets with long-term growth potential.
In conclusion, in the face of the current market environment, investors should remain calm, conduct in-depth research, continuously learn, and adopt diversified investment strategies to maximize investment returns and control risks. This is not only the core concept of "The Three Golden Moving Average Strategy" but also the investment philosophy that Cheong Hong Yuan has advocated and practiced for many years.